Zuora, the SaaS startup run by industry veterans from Salesforce and Webex, and backed by the face of SaaS himself, Marc Benioff, is launching its online billing solution today.
As Erick explained in March, Zuora aims to alleviate the need for online businesses to develop their own billing systems, especially to handle recurring payments like those associated with subscriptions.
Its so-called “Z-Billing Platform” that goes live today handles four main billing-related areas: customer accounts and subscriptions, product catalogs, billing operations, and order management. The whole offering is provided a la Salesforce as an on-demand solution. Online businesses just need to configure their Zuora accounts, import data from their old billing systems, and plug in their sites through a set of APIs. Customers who buy items or subscribe to services on their sites will then get handled by Zuora, which tracks orders, invoices and payments.
Naturally, Zuora has opted for a utility-like pricing model. The company will take 2% of all invoiced amounts, with that percentage increasing decreasing as payments get bigger and eventually getting capped completely for particularly expensive items.
The startup has already signed up six clients, three of which have implemented the system, but only one of which has been disclosed: Coremetrics, which provides Omniture-like web analytics. CEO Tien Tzuo says that Coremetrics demonstrates the capabilities of Zuora’s billing system particularly well because it requires 27 different pricing models, each of which must be handled appropriately.
Since the founders of Zuora come from a SaaS background, you can expect them to partner initially with other SaaS companies. However, the platform is not limited to this category; it potentially can be implemented for a wide range of services from music streaming to online dating.
I cant understand why the 2% ‘charge’ gets larger as items get more expensive, as it would cost the company less to handle 1000 accounts of $100 then it would to handle 10,000 accounts of $10.
Good luck intergrating this into your banking, accounting, customer, inventory and analysis databases in a sox compliant kind of way. And it knocks 2% or more off your margin! Saas has its place, but this sounds like a recipe for disaster.
the bubble is gonna burst watch out!!!
The key is solving a problem, in this web 2.0 world you dont have to solve a problem, you just have to be fancy with a fancy name.
This doesn’t seem like a new idea to me. Isn’t there a bunch of other companies doing exactly the same thing???
This is not original, why is web 2.0 not doing something that changes the world everyone wants to make something for a buyout to google or msft, that sucks really.
@2, I’m pretty sure SOX compliance is relevant to public companies which is probably not their target market.
Are there features in this service that PayPal or Google Checkout don’t have?
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I had thought the market of online billing was already over crowded a few years ago. In Australia, we have BPay since year 1997, supported by major banks and services companies.
BPAY payment from a debit account
* 45.1 cents per transaction
BPAY payment from a credit card account
* 40.7 cents per transaction; plus
* 0.297% of the transaction value.
In TechCrunch, we have seen too many startups doing long existing Web 1.0 businesses but just wearing Web 2.0 hat.
“In TechCrunch, we have seen too many startups doing long existing Web 1.0 businesses but just wearing Web 2.0 hat.”
That may be the case, but there were many good ideas from pre-2000 that were simply to early to market. Maybe you haven’t noticed, but the online landscape has matured quite a bit in the last few years with dramatically increased connectivity, subscribers, and usage.
I seem to have missed where it was claimed that this offering was “the first…” anything.
TC should focus on real good startups not on crappy web 1.0 wanna be 2.0ish stuff.
“with that percentage increasing as payments get bigger”
Mark – I think you meant to say “decreasing”?
does the 2% fee actually include the credit card fee?
[Note to company reps: please message me on Facebook to contact me]
@Peter – Yes I did, sorry – fixed.
““with that percentage increasing as payments get bigger””
“Mark – I think you meant to say “decreasing”?”
The article says ‘increasing’, this must be a typo. Decreasing would make more sense.
2% commission would be ok, if it doesn’t come on top of the credit card processing fees.
If it’s just the 2% fee that tops Paypal which has % fee which is like 2% and I think another $.30 fee as well per transaction.
No, Paypal is 4.9% + $.30 (it can go as low as 1.9% if monthly charges go above US$100K, but $.30 remains). This looks like a straight percentage, no fee.
@Frank
If that’s the case than this looks like something work taking a look at.
“Benioff agrees…”
No where in your article is he quoted.
Is SF using Zoura for the subscription billing??
That’s it. Please excuse me everyone.
Hey dipshit! #20/ “Jim”- He is an investor (per crunchbase). Please try to pay attention, it really isn’t difficult.
It offers lower fees and supplies a complete order management system? Only the comment threads on TechCrunch could label that as a guaranteed fail.
This looks like a great deal, especially for small businesses.
It looks like their APIs are not 100% ready to integrate with ANY other application.
Right now you are limited to sending your customer data to your SalesForce account and having SalesForce keep your Zuora account up to date. I guess that’s why Benioff is a heavy investor.
But even with that as the only option now it looks like a service worth taking a look at. Then when they get their APIs fully open you can skip the salesforce step if you don’t use salesforce to manage your CRM.
I am looking forward to this one.
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If you’d like to have SaaS billing happen on your own server, but don’t want to write the code, check out the recently-released SaaS Rails Kit: http://railskits.com/saas/
Just-add-water recurring billing code for developers building Rails apps.
How is this application any different then what Freshbooks does or for that matter what Zoho Invoices does? I was hoping that when I first heard about this application a few months ago that this application would be able to integrate with a SAAS web application via an API to suspend accounts if the credit card does not process successfully (with rules defined by the owner) in specified time and or allow the customer to reactivate the account upon successfully updating their credit card. What problem is this application really solving then?
I think what most are missing is that Zoura is not about consumer/paypal transaction processing. It is not even e-commerce transaction processing. It is about SaaS product billing & invoicing. So, Salesforce.com can offer more than a simple fixed fee, monthly subscription. WebEx.com offered per-minute pricing, monthly subscription (all you can eat) as well as per event pricing. Salesforce and other SaaS companies would love to do the same to better monetize their customer base. That way a small company that cannot affor SF.com today could use SF.com relatively cheaply and SF.com can fully monetize high value CRM customers who are transacting millions per sale. SaaS business models are unique because they **can** be charged based on usage, which implies metering how much the user is using. Rather than one gargantuan price, you can now pay as you go/use. Actually billin for this is tough stuff.
Big deal! Another billing company.
So obvious that they’re hoping to sell off to the highest bidder and cash in their chips.
Also, I guess I’m a dip too because I thought the article had a quote as well.
Oh well!
This is a great idea and very much needed by a lot of companies that cannot build the infrastructure in-house. However, our company is already providing a complete billing engine with a fully defined API. http://www.intrannuity.com
Our developer documentation is here: http://www.ibillingclient.org
Jones #27 nails it. I think Mark’s piece would have been helped had he located the origin of the company in SF.com’s need to offer more flexible pricing than their per-seat per-usage model can afford. The founder says he’s trying to get to true utility-style metering. An interview with him (or maybe a bit more research prior to publishing…) would help clarify the confusion.